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Allegion (ALLE)
NYSE:ALLE
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Allegion
(NYSE:ALLE)68Neutral
Positive Factors
Earnings
Adjusted EPS reported at $1.86, which is higher than the consensus of $1.76.
Financial Performance
Operating profit margins expanded to 22.1% due to favorable volume leverage and regional mix.
Negative Factors
Market Environment
Price target reduced to $145 (from $150) against muted end-market environment, slowdown in e-lock.
Allegion (ALLE) vs. S&P 500 (SPY)
Market Cap
$10.91B
Dividend Yield1.52%
Average Volume (3M)983.23K
Price to Earnings (P/E)18.5
Beta (1Y)1.06
Revenue Growth3.33%
EPS Growth11.51%
CountryUS
Employees12,400
SectorIndustrials
Sector Strength66
IndustryCorporate Services
Share Statistics
EPS (TTM)6.82
Shares Outstanding86,290,350
10 Day Avg. Volume930,047
30 Day Avg. Volume983,226
Financial Highlights & Ratios
PEG Ratio1.61
Price to Book (P/B)N/A
Price to Sales (P/S)2.93
Price to Cash Flow (P/CF)11.80
P/FCF Ratio11.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$133.50Price Target Upside1.68% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering6
Allegion Business Overview & Revenue Model
Company DescriptionAllegion plc is a global provider of security products and solutions, headquartered in Dublin, Ireland. The company operates in the security and safety sectors, focusing on the design, manufacture, and sale of mechanical and electronic security products and services. Allegion's core products include locks, door closers, exit devices, electronic security systems, and access control systems. The company serves customers across various industries, including commercial, institutional, and residential markets, with a strong presence in the Americas, Europe, Asia, and other regions.
How the Company Makes MoneyAllegion makes money primarily through the sale of its security products and solutions. The company's revenue model is centered around manufacturing and distributing a wide range of mechanical and electronic security products, which are sold to a diverse customer base that includes commercial enterprises, institutions, and residential customers. Key revenue streams include the sale of locks, door hardware, electronic security systems, and access control solutions. Additionally, Allegion benefits from strategic partnerships and alliances that enhance its market reach and product offerings. The company's earnings are influenced by factors such as technological advancements, regulatory requirements, and global demand for security solutions.
Allegion Financial Statement Overview
Summary
Allegion demonstrates strong income statement performance with consistent revenue and profit growth. The cash flow statement shows positive trends, highlighting robust cash generation. However, the balance sheet's negative equity is a significant concern, indicating financial risk that could impact long-term stability.Income Statement
Allegion has demonstrated consistent revenue growth, with a notable increase of approximately 3.3% from 2023 to 2024. The gross profit margin is exceptionally strong, given that gross profit matches total revenue, indicating high efficiency in cost management. The net profit margin has also improved, signaling enhanced profitability. EBIT and EBITDA margins have remained robust, reflecting strong operational performance.85
Very Positive
Balance Sheet
The balance sheet presents a mixed picture. The total debt has been eliminated in 2024, which is a positive development. However, stockholders' equity has turned negative, which is concerning and indicates potential financial instability. This negative equity affects the debt-to-equity ratio and raises caution about the company's financial leverage and risk profile.50
Neutral
Cash Flow
Allegion's cash flow analysis reflects a healthy operating cash flow with significant growth over the years. Free cash flow has also grown, which is a positive indicator of financial health. The operating cash flow to net income ratio shows efficient cash generation relative to net earnings. However, the free cash flow to net income ratio suggests room for improvement, indicating potential for further optimization in capital expenditures.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.77B | 3.65B | 3.27B | 2.87B | 2.72B | Gross Profit |
| 1.67B | 1.58B | 1.32B | 1.20B | 1.18B | EBIT |
| 780.70M | 708.40M | 586.40M | 530.20M | 556.80M | EBITDA |
| 919.80M | 821.90M | 688.30M | 657.30M | 497.70M | Net Income Common Stockholders |
| 597.50M | 540.40M | 458.00M | 483.00M | 314.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 503.80M | 468.10M | 288.00M | 397.90M | 480.40M | Total Assets |
| 4.49B | 4.31B | 3.99B | 3.05B | 3.07B | Total Debt |
| 2.00B | 2.02B | 2.09B | 1.44B | 1.43B | Net Debt |
| 1.50B | 1.55B | 1.81B | 1.04B | 949.20M | Total Liabilities |
| 2.99B | 2.99B | 3.05B | 2.29B | 2.24B | Stockholders Equity |
| 1.50B | 1.32B | 944.50M | 762.40M | 829.40M |
| Cash Flow | Free Cash Flow | |||
| 582.90M | 516.40M | 395.50M | 443.20M | 443.20M | Operating Cash Flow |
| 675.00M | 600.60M | 459.50M | 488.60M | 490.30M | Investing Cash Flow |
| -228.40M | -129.10M | -994.10M | -31.60M | -56.70M | Financing Cash Flow |
| -394.50M | -298.70M | 437.00M | -529.30M | -321.90M |
Allegion Technical Analysis
Positive
131.30
Price Trends
130.10
Positive
135.79
Negative
132.25
Negative
Market Momentum
-0.90
Negative
54.83
Neutral
61.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALLE, the sentiment is Positive. The current price of 131.3 is above the 20-day moving average (MA) of 128.73, above the 50-day MA of 130.10, and below the 200-day MA of 132.25, indicating a neutral trend. The MACD of -0.90 indicates Negative momentum. The RSI at 54.83 is Neutral, neither overbought nor oversold. The STOCH value of 61.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALLE.
Allegion Risk Analysis
Allegion disclosed 36 risk factors in its most recent earnings report. Allegion reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Allegion Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $42.21B | 9.47 | 19.35% | 1.04% | 2.12% | 1.63% | |
75 Outperform | $53.52B | 30.96 | 9.80% | 1.82% | -4.53% | -14.72% | |
73 Outperform | $20.92B | 26.09 | 142.12% | 0.78% | 7.21% | 36.45% | |
68 Neutral | $10.91B | 18.54 | 42.39% | 1.52% | 3.33% | 11.51% | |
63 Neutral | $9.79B | 18.81 | 28.63% | 1.93% | -0.90% | -1.69% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
60 Neutral | $15.72B | 19.76 | -118.61% | 1.59% | -1.74% | -6.91% |
* Industrials Sector Average
Performance Comparison
ALLE
Allegion
131.30
2.15
1.66%
DHI
DR Horton
133.42
-17.90
-11.83%
JCI
Johnson Controls
80.06
20.10
33.52%
LII
Lennox International
606.61
147.69
32.18%
MAS
Masco
75.20
1.21
1.64%
AOS
A. O. Smith Corporation
69.41
-14.45
-17.23%
Allegion Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -1.57% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
Allegion's earnings call highlighted strong revenue growth, successful capital deployment, and record cash flow, indicating solid performance in 2024, especially in the Americas segment. However, challenges in the international segment, price and productivity headwinds, and the exit from the China market were notable lowlights. Overall, the positive aspects significantly outweighed the negatives.Highlights
Strong Revenue Growth in Q4
Allegion reported Q4 revenue of $945.6 million, an increase of 5.4% compared to 2023, with organic revenue growth of 3.5% driven by favorable price and volume.
Margin Expansion and Earnings Increase
Q4 adjusted operating margin increased by 10 basis points, and adjusted earnings per share of $1.86 increased by 10.7% versus the prior year.
Successful Capital Deployment
Allegion executed $137 million in M&A activities in 2024, with five bolt-on acquisitions, and completed share repurchases of approximately $220 million.
Growth in Americas Segment
Americas segment delivered strong results with a 4.6% organic growth in Q4, driven by both favorable price and volume.
Record Cash Flow
Full year 2024 available cash flow was $582.9 million, a 12.9% increase versus last year, driven by higher earnings and improvements in working capital.
Lowlights
Challenges in International Segment
International segment had a tough Q4 with a reported revenue increase of 1.5% but a decrease of 0.7% organically, due to a challenging macroeconomic environment, particularly in Germany.
Price and Productivity Headwinds
Price and productivity, net of inflation and investments, were a slight headwind in Q4, although strong for the full year.
China Market Exit
Allegion took steps to exit operations in China, which represented a slight headwind to 2025 organic growth.
Company Guidance
During the Allegion Fourth Quarter 2024 Earnings Call, the company provided guidance for 2025, anticipating total revenue growth between 1% and 3% and organic revenue growth of 1.5% to 3.5%. The Americas segment is expected to see low to mid-single-digit growth, while the International segment remains flat. Adjusted earnings per share are projected to be in the range of $7.65 to $7.85, indicating a growth of 1.5% to 4% over the prior year. Allegion aims to achieve 85% to 90% of adjusted net income as available cash flow. The company's guidance also factors in challenges such as tariffs, with less than 5% of cost of goods sold imported from China, and potential pricing actions to mitigate cost impacts from Mexico tariffs. Allegion continues to focus on balanced capital deployment, including accretive acquisitions like Next Door Company and Lemaar, and has an active pipeline for future M&A activities.Allegion Corporate Events
Executive/Board Changes
Allegion Expands Board with Gregg Sengstack Appointment
Positive
Dec 5, 2024
Allegion plc has expanded its Board of Directors by appointing Gregg C. Sengstack, a seasoned executive with over 30 years of experience, to enhance their strategic oversight. Sengstack, known for his expertise in international markets and finance, will contribute to the Audit and Finance, Compensation and Human Capital, and Corporate Governance and Nominating Committees. His extensive leadership background, including roles at Franklin Electric, is expected to bolster Allegion’s global security solutions focus.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.